Draft Amendments to Tariff Policy as of 30th May 2018

Proposed_amendments_in_Tariff_Policy

1.0 INTRODUCTION

Draft Amendments to Tariff Policy

MINISTRY OF POWER RESOLUTION
New Delhi, the 28thJanuary, 2016

TARIFF POLICY

As on 30.05.2018

  1. 1.1.  In compliance with section 3 of the Electricity Act 2003, the Central Government notified the Tariff Policy on 6th January, 2006. Further amendments to the Tariff Policy were notified on 31st March, 2008, 20th January, 2011 and 8th July, 2011. In exercise of powers conferred under section 3(3) of Electricity Act, 2003, the Central Government hereby notifies the revised Tariff Policy to be effective from the date of publication of this resolution in the Gazette of India.Notwithstanding Anything done or any action taken or purported to have been done or taken under the provisions of the Tariff Policy notified on 6th January, 2006 and amendments made thereunder, shall, in so far as it is not inconsistent with this Policy, be deemed to have been done or taken under provisions of this revised policy.
  2. 1.2.  The National Electricity Policy has set the goal of adding new generation capacity and enhancing per capita availability of electricity per year to not only eliminate energy and peaking shortages but to also have a spinning reserve as specified by the Central Electricity Authority. Development of the power sector has also to meet the challenge of providing access for to affordable electricity to all households in next five years.
  3. 1.3.  It is therefore essential to attract adequate investments in the power sector by providing appropriate return on investment as budgetary resources of the Central and State Governments are incapable of providing the requisite funds. It is equally necessary to ensure availability of electricity to different categories of consumers at reasonable rates for achieving the objectives of rapid economic development of the country and improvement in the living standards of the people.
  4. 1.4.  Balancing the requirement of attracting adequate investments to the sector and that of ensuring reasonability of user charges for the consumers is the critical challenge for the regulatory process. Accelerated development of the power sector and its ability to attract necessary investments calls for, inter alia, consistent regulatory approach across the country. Consistency in approach becomes all the more necessary considering the large number of States and the diversities involved.
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India won’t levy duty on solar gear imports

Bengaluru: The government has decided not to impose safeguards duty on solar equipment from China and Malaysia, overruling the directorate general of safeguards’ recommendation of a 70% levy that had delighted local manufacturers but alarmed developers who felt that the steep rise in input costs would make projects unviable.

The Delhi High Court disposed of a petition challenging the proposed duty after the government’s counsel said the directorate general of safeguards’ recommendation was not binding. The counsel showed the court confidential minutes of a meeting held by the standing committee on safeguards, which had decided not to impose the duty.

Anand Kumar, secretary, ministry of new and renewable energy, confirmed there would be no provisional safeguard duty. “As of now there will be no duty,” he told ET.

“If it ever comes up in future, we will make sure the interests of all stakeholders are safeguarded,” said Kumar.

In the high court, Justices Sanjiv Khanna and Chander Shekhar did not comment on the merits of the petition by Acme Solar and said it should be treated “as a representation to the respondents before the final decision is taken by the Central government”.

The judges remarked that the minutes of meeting suggested that no imposition of provisional duty was likely, and that if any such step was taken, Acme Solar could approach the court again with a fresh petition. “This order would not foreclose the right of the petitioner to challenge any adverse order in accordance with the law,” the court said.

The development comes as a huge relief to solar developers, since over 90% of the equipment used in Indian solar projects is imported.

Acme Solar, in its petition, had claimed that imposing the duty would increase solar tariffs from around Rs 2.50 per unit at present to around Rs 4.50 per unit, which would render their business unviable.

India’s solar power capacity has expanded rapidly in recent years, led by big investments by companies such as ReNew Power, Tata Power, Hero Future Energies, Greenko, Acme Solar and Azure Power. Relatively cheap imported equipment has helped Indian solar power tariffs plunge to a record at auctions.

The DG of safeguards had made his recommendation following a petition from the Indian Solar Manufacturers Association (ISMA), which claimed to represent local solar manufacturers, maintaining that Chinese and Malaysian solar panels were being priced lower than locally made equipment. Acme Solar’s petition had questioned the legitimacy of ISMA as a voice of local industry, claiming that many of its members had their units in special economic zones.

Earlier Shapoorji Pallonji Infrastructure too had moved the Madras High Court against the DG of safeguards’ proposal, claiming it had not been given enough time to respond during the investigation, but the petition was dismissed.

Safeguard duty — as distinct for anti-dumping duty — can be imposed on a product for a maximum of four years if its import increases unexpectedly to the extent that this causes serious injury to domestic industry. Separately, the director general of anti-dumping and allied services, is also investigating whether anti-dumping duty should be imposed on solar imports.

The manufacturers who filed the petition are Mundra Solar (part of Adani Group), Indosolar, Jupiter Solar Power, Helios Photo Voltaic and Websol Energy Systems.

Other manufacturers, who would have gained if a safeguards duty was imposed, include Vikram Solar, Waree Energies, Tata Power Solar Systems, Emmvee Solar Photovoltaic and Moserbaer Solar.

Source: ET

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BESCOM Proposes a Tariff Separation for Open Access Consumers Above 1 MW in Karnataka

Bangalore Electricity Supply Company (BESCOM) has proposed a separate tariff for >1 MW open access consumers, as it causes the non-recovery of fixed costs.

BESCOM has requested for an increase in charges for consumers of 1 MW and above with the goal of recovering fixed charges, as consumers try to find the cheapest variable rate available. Instead of eliminating the open access program, BESCOM has tried to recover more revenue from these consumers.

To calculate this tariff, BESCOM considered the existing approved rates for FY17 open access sales as base data to divide the demand and energy charges. Considering the existing approved rates of fixed and variable cost and based on the actual recovery during FY17, BESCOM says it has recovered only 11 percent of the cost through fixed charges with the remaining 89 percent recovered through variable charges.BESCOM Proposes a Tariff Separation for Open Access Consumers Above 1 MW in KarnatakaTo ensure the recovery of full fixed costs by reducing the energy charge, it is proposing to increase the fixed charges. BESCOM has also proposed to increase the billing demand to 85 percent of the contract demand or the maximum demand recorded, whichever is higher. BESCOM also wants to penalize proportionate consumption consequent to exceeding the contract demand.

Through this proposal, BESCOM is attempting to generate additional revenue from high tension (HT) consumers with contracted demand (CD) of 1 MW and above by encouraging them to consume over and above the average 12 months consumption through a concessional tariff rate. If >1MW consumers are attracted to this scheme, HT sales will go up, which in-turn would help BESCOM achieve its HT sales target approved by the KERC for the year. This is expected to have a positive impact on the cross-subsidy generation, which could then reduce the subsidy burden on state government for the respective year.

BESCOM is proposing having a separate tariff under both the HT and low tension (LT) category with a time of day tariff. Per the prevailing tariff structure, battery charging units are also being billed under a commercial tariff.

BESCOM also noted that the cross-subsidy surcharge calculated by Karnataka Electricity Regulatory Commission (KERC) and recovered from open access consumers is often insufficient to recover the entire loss of a cross subsidy.  Renewable purchase obligation (RPO) targets are also fixed to encourage solar energy. As solar generation has increased significantly since last year, BESCOM has a proposed levy of wheeling and cross subsidy surcharge for renewable energy, including solar energy.

Source: Mercom

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Renewable Energy and Jobs Annual Review 2018 – IRENA

Global renewable energy employment reached 10.3 million jobs in 2017, an increase of 5.3% compared with the number reported in the previous year.

An increasing number of countries derive socio-economic benefits from renewable energy, but employment remains highly concentrated in a handful of countries, with China, Brazil, the United States, India, Germany and Japan in the lead.

China alone accounts for 43% of all renewable energy jobs. Its share is particularly high in solar heating and cooling (83%) and in the solar photovoltaic (PV) sector (66%), and less so in wind power (44%).

The PV industry was the largest employer (almost 3.4 million jobs, up 9% from 2016). Expansion took place in China and India, while the United States, Japan and the European Union lost jobs.

Biofuels employment (at close to 2 million jobs) expanded by 12%, as production of ethanol and biodiesel expanded in most of the major producers. Brazil, the United States, the European Union and Southeast Asian countries were among the largest employers.

Employment in wind power (1.1 million jobs) and in solar heating and cooling (807 000 jobs) declined as the pace of new capacity additions slowed.

Large hydropower employed 1.5 million people directly, of whom 63% worked in operation and maintenance. Key job markets were China, India and Brazil, followed by the Russian Federation, Pakistan, Indonesia, Iran and Viet Nam.

Employment remains limited in Africa, but the potential for off-grid jobs is high, particularly as energy access improves and domestic supply chain capacities are developed.

Click here for the report

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Revision in Electricity Tariff with effect from 1 April, 2018 and Implementation thereof.

Comm_Cir Tariff 18-19_302

Revision in Electricity Tariff with effect from 1 April, 2018 and Implementation thereof.

Subject:

Revision in Electricity Tariff with effect from 1 April, 2018 and Implementation thereof.

MAHAVITARAN Maharashtra State Electricity Distribution Co. Ltd.

Maharashtra State Electricity Distribution Co. Ltd.
(A Govt. of Maharashtra Undertaking) CIN : U40109MH20005SGC153645 PLOT No. G-9, PRAKASHGAD, Prof. ANANT KANEKAR MARG, BANDRA (East), MUMBAI-400051

COMMERCIAL CIRCULAR No. -302

Reference: 1) MERC Tariff Order dt. 0311112016 in the Case No. 48 of2016.2) Commercial Circular No. 275 Dated 18.11.2016.

3) Commercial Circular No. 284 Dated 11.04.2017.

The Maharashtra Electricity Regulatory Commission, in exercise of its powers under Sections 61 and 62 of the Electricity Act (EA), 2003, and in pursuance of the MYT Regulations and all other powers enabling it in this behalf, and after taking into consideration MSEDCL’s submissions, the written and oral suggestions and objections received and the responses of MSEDCL, and all other relevant material, has issued Multi Year Tariff Order dated 03 November 2016 in Case No.48 of2016.

Accordingly, the guidelines as under are issued for implementation of the said order of the Commission without prejudice to the rights ofMSEDCL to take any action as provided in the law.

The revised tariffs as per this Order shall be applicable from I April, 2018 onwards till 31st March 2019 .

Where the billing cycle of a consumer is different from the date of applicability of the revised tariffs, the tariffs should be applied for the consumption on a pro rata basis. The bills for the respective periods as per the existing and revised tariffs shall be calculated based on the pro rata consumption (units consumed during the respective periods arrived at on the basis of the average unit consumption per day multiplied by the number of days in the respective periods falling under the billing cycle).

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Govt amends solar bidding norms, developers can now pass on duty hike

The government has amended solar bidding norms, allowing developers to pass on the burden of any increase in duties on solar equipment to discoms, ending the industry’s apprehensions about likely impact of possible anti-dumping and safeguard duties on imported equipment.

The move will allow developers to bid as per current policies of the government, a senior government official said. It would, however, mean that any duty hike will ultimately be borne by the end consumer.

“It is hereby clarified that the term ‘change in the rates of any taxes’ as mentioned in clause 5.7.2 of ‘Guidelines for tariff based competitive bidding process for procurement of power from grid connected solar PV power projects’ — notified on August 3, 2017 — includes change in rates of taxes, duties and cess,” the ministry of new and renewable energy (MNRE) said in a notification issued on Monday.

Anand Kumar, secretary in MNRE, said there has been some uncertainty in the market due to fears of safeguards and anti-dumping duties. “The bidders did not know how to bid realistically and accurately in the market, so there is a lot of speculation and we could get unrealistic rates as a result,” he told ET.

The ‘Change in Law’ clause earlier included any change in the rates of any tax that has a direct effect on the project.

In the current scenario, where the government is still examining the veracity of data submitted by the domestic solar equipment industry for safeguards investigation, the move will prevent developers from taking undue advantage of this uncertainty, Kumar said. “Suppose I don’t make it a pass through, and bidders quote high rates. And then the duty never comes, then the bidder is taking undue advantage,” he explained. “So even if the price is increasing to the discoms, it is increased due to government policy,” Kumar said.

The Directorate General of Safeguards in January this year had proposed a whopping 70% safeguards duty on imports of solar cells and modules from China and Malaysia, after domestic manufacturers’ body Indian Solar Manufacturers Association claimed to be facing serious injury on account of imports from these nations.

Kumar, however, said, “Unless we are sure that there is merit in the case and the data is right, we cannot let in happen. MNRE is of the opinion that it should not disrupt solar mission.” Power and MNRE minister RK Singh had last month said the government was mulling pass through of duties on solar projects to de-risk them.

The Indian government has set itself a target of achieving 175 GW of installed renewable energy capacity, of which 100 GW is to come from solar.

Source: ET

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MNRE revises BIS Quality Control (Requirement for Compulsory Registration under BIS Act) Order 2017

The Ministry of New and Renewable Energy (MNRE) had notified the above mentioned Quality Control (Requirement for Compulsory Registration under BIS Act) Order 2017 vide Government of India Gazette notification No. 2561 dated 5th September 2017. As per this notification the specified standards shall come into force on expiry of one year from the date of its publication in the Official Gazette.

2. The MNRE has initiated action for implementation of the said order. The test labs are being set-up for performance testing and certification of all products as per standards given in the said Quality Control Order 2017. Later on it was felt that the date for enforcement of the Quality Control Order 2017 dated 5.9.2017 for quality assurance as per the specified standards should be brought forward in order to ensure that quality control benefits the industry at the earliest possible. In this regard, the Ministry had sought inputs and suggestions from the various stakeholders.

3. The preparedness of test labs has been reviewed in consultation with Bureau Indian Standards (BIS) and test labs. It has now been decided that the said order in respect of SPV Modules shall come into force w.e.f. 1.4.2018 except for fire test which will be effective w.e.f. 1.07.2018. All test labs will set up fire test facility as per the specified standards, with BIS approval by 1.07.2018. For supplies from 1.04.2018 to 30.06.2018, the representatives of the manufactures would submit samples to an authorised lab for testing and give a self- certification that the module adheres to the prescribed standards. In case the sample fails to conform to the Indian Standards, the project developer will be penalised as per the provision contained in the Quality Control Order and guidelines of the Ministry of New and Renewable Energy (MNRE), Government of India. For invertor testing, test labs have been requested to obtain approval of BIS by 31.03.2018 for testing invertors of capacities up to 100kW and by 1.09.2018 for capacities more than 100kW. The word “Power Convertors” is replaced with “Invertors” at Sl. No. 4 in the schedule of the Quality Control Order.

4. BIS has been requested to follow the guidelines for registration of products and test labs. The MNRE will bring out a list of test labs approved by BIS by the end of March, 2018, which will be uploaded on MNRE web for public information. The revised Quality Control Order 2017 with schedule as above will be notified.

Subject:

Revised
Systems/Devices/Components Goods Order 2017.

To
All stakeholders

schedule and enforcement date of Solar Photovoltaic

(Dr. B. S. Negi) Adviser/Scientist-G(R&D Coord.) Email: negi@nic.in Telefax: 24368581

Revised-Schedule-of-CRO_SPV-2017 (1)

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